Exhibit 4.2
GENISYS RESERVATION SYSTEMS, INC.
AND
CONTINENTAL STOCK TRANSFER
AND TRUST COMPANY
REDEEMABLE WARRANT AGREEMENT
Dated as of , 1997
AGREEMENT, dated as of this _____ day of ___________, 1997, between GENISYS
RESERVATION SYSTEMS, INC., a New Jersey corporation (the "Company"), and
CONTINENTAL STOCK TRANSFER AND TRUST COMPANY, as Warrant Agent (the "Warrant
Agent").
W I T N E S S E T H:
WHEREAS, in connection with (i) the offering to the public pursuant to the
Prospectus (the "Prospectus") contained in the Company's Registration
Statement on Form SB-2 (Registration No. 333-15011) of up to 900,000 shares
of the Company's common stock, $.0001 par value per share (the "Common
Stock"), (ii) the offering to the public pursuant to the Prospectus of up
to 2,400,000 redeemable warrants (the "Warrants") comprised of 1,500,000
Class A Redeemable Warrants ("Class A Warrants") and 900,000 Class B
Redeemable Warrants ("Class B Warrants"), each Warrant entitling the holder
thereof to purchase one additional share of Common Stock, (iii) the over-
allotment option to purchase up to an additional 135,000 shares of Common
Stock and/or 225,000 Class A Warrants and 135,000 Class B Warrants, (the
"Over-allotment Option"), and (iv) the sale to ▇.▇. ▇▇▇▇▇ & Co., Inc.
("▇.▇. ▇▇▇▇▇"), its successors and assigns (the "Underwriter"), of warrants
(the "Underwriter's Warrants") to purchase up to 90,000 shares of Common
Stock and/or 150,000 Class A Warrants and 90,000 Class B Warrants, the
Company will issue up to 3,000,000 Warrants (subject to increase as
provided in the Underwriter's Warrant Agreement and herein); and WHEREAS,
the Company desires to provide for the issuance of certificates
representing the
Warrants; and
WHEREAS, the Company desires the Warrant Agent to act on behalf of the
Company, and the Warrant Agent is willing to so act, in connection with the
issuance, registration, transfer and exchange of certificates representing
the Warrants and the exercise of the Warrants.
NOW, THEREFORE, in
consideration of the premises and the mutual agreements hereinafter set
forth and for the purpose of defining the terms and provisions of the
Warrants and the certificates representing the Warrants and the respective
rights and obligations thereunder of the Company, ▇.▇. ▇▇▇▇▇, the holders
of certificates representing the Warrants and the Warrant Agent, the
parties hereto agree as follows:
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SECTION 1. Definitions. As used herein, the following terms shall have the
following meanings, unless the context shall otherwise require:
(a) "Common Stock" shall mean stock of the Company of any class whether now
or hereafter authorized, which has the right to participate in the voting
and in the distribution of earnings and assets of the Company without limit
as to amount or percentage.
(b) "Corporate Office" shall mean the office of the Warrant Agent (or its
successor) at which at any particular time its principal business in New
York, New York, shall be administered, which office is located on the date
hereof at ▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
(c) "Exercise Date" shall mean, subject to the provisions of Section 5(b)
hereof, as to any Warrant, the date on which the Warrant Agent shall have
received both (i) the Warrant Certificate representing such Warrant, with
the exercise form thereon duly executed by the Registered Holder hereof or
his attorney duly authorized in writing, and (ii) payment in cash or by
check made payable to the Warrant Agent for the account of the Company, of
the amount in lawful money of the United States of America equal to the
applicable Purchase Price in good funds.
(d) "Initial Warrant Exercise Date" shall mean ,1997.
(e) "Initial Warrant Redemption Date" shall mean twelve (12) months after
the date of the Prospectus.
(f) "Purchase Price" shall mean, subject to modification and adjustment as
provided in Section 8, $5.75 per share for each Class A Warrant and $6.75
per share for each Class B Warrant and further subject to the Company's
right, in its sole discretion, to decrease the Purchase Price.
(g) "Registered Holder" shall mean the person in whose name any certificate
representing the Warrants shall be registered on the books maintained by
the Warrant Agent pursuant to Section 6.
(h) "Subsidiary" or "Subsidiaries" shall mean any corporation or
corporations, as the case may be, of which stock having ordinary power to
elect a majority of the Board of Directors of such corporation (regardless
of whether or not at the time stock of any other class or classes of such
corporation shall have or may have voting power by reason of the happening
of any contingency) is
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at the time directly or indirectly owned by the Company or by one or more
Subsidiaries, or by the Company and one or more Subsidiaries.
(i) "Transfer Agent" shall mean Continental Stock Transfer and Trust
Company, or its authorized successor.
(j) "Underwriting Agreement" shall mean the underwriting agreement dated
____________, 1997 between the Company and the Underwriter relating to the
purchase for resale to the public of 900,000 shares of Common Stock,
1,500,000 Class A Warrants and 900,000 Class B Warrants plus an
over-allotment option of 135,000 shares of Common Stock and/or 225,000
Class A Warrants and 135,000 Class B Warrants.
(k) "Underwriter's Warrant Agreement" shall mean the agreement dated as of
, 1997 between the Company and the Underwriter relating to and governing
the terms and provisions of the Underwriter's Warrants.
(l) "Warrant Certificate" shall mean certificates representing each of the
Warrants substantially in the form annexed hereto as Exhibit A.
(m) "Warrant Expiration Date" shall mean, unless the Warrants are redeemed
as provided in Section 9 hereof prior to such date, 5:00 p.m. (New York
time), on , 2001, or, if such date shall in the State of New York be a
holiday or a day on which banks are authorized to close, then 5:00 p.m.
(New York time) on the next following day which in the State of New York is
not a holiday or a day on which banks are authorized to close, subject to
the Company's right, prior to the Warrant Expiration Date, in its sole
discretion, to extend such Warrant Expiration Date on five business days
prior written notice to the Registered Holders.
(n) "Warrant Agent" shall mean Continental Stock Transfer and Trust
Company, or its authorized successor.
SECTION 2. Warrants and Issuance of Warrant Certificates.
(a) Each Warrant shall initially entitle the Registered Holder of the
Warrant Certificate representing such Warrant to purchase at the Purchase
Price therefor from the Initial Warrant Exercise Date until the Warrant
Expiration Date one share of Common Stock upon the exercise thereof,
subject to modification and adjustment as provided in Section 8.
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(b) Upon execution of this Agreement, Warrant Certificates representing
1,500,000 Class A Warrants to purchase up to an aggregate of 1,500,000
shares of Common Stock and 900,000 Class B Warrants to purchase up to an
aggregate 900,000 shares of Common Stock (subject to modification and
adjustment as provided in Section 8) shall be executed by the Company and
delivered to the Warrant Agent.
(c) Upon exercise of the Over-allotment Option, in whole or in part,
Warrant Certificates representing up to 225,000 Class A Warrants to
purchase up to an aggregate of 225,000 shares of Common Stock and 135,000
Class B Warrants to purchase up to an aggregate of 135,000 shares of Common
Stock (subject to modification and adjustment as provided in Section 8)
shall be executed by the Company and delivered to the Warrant Agent.
(d) Upon exercise of the Underwriter's Warrants as provided therein,
Warrant Certificates representing all or a portion of 150,000 Class A
Warrants to purchase up to an aggregate of 150,000 shares of Common Stock
and 90,000 Class B Warrants to purchase up to an aggregate of 90,000 shares
of Common Stock (subject to modification and adjustment as provided in
Section 8 hereof and in the Underwriter's Warrant Agreement), shall be
countersigned, issued and delivered by the Warrant Agent upon written order
of the Company signed by its Chairman of the Board, President or a Vice
President and by its Treasurer or an Assistant Treasurer or its Secretary
or an Assistant Secretary.
(e) From time to time, up to the Warrant Expiration Date, as the case may
be, the Warrant Agent shall countersign and deliver Warrant Certificates in
required denominations of one or whole number multiples thereof to the
person entitled thereto in connection with any transfer or exchange
permitted under this Agreement. No Warrant Certificates shall be issued
except (i) Warrant Certificates initially issued hereunder, (ii) Warrant
Certificates issued upon any transfer or exchange of Warrants, (iii)
Warrant Certificates issued in replacement of lost, stolen, destroyed or
mutilated Warrant Certificates pursuant to Section 7, (iv) Warrant
Certificates issued pursuant to the Underwriter's Warrant Agreement
(including Warrants in excess of the Underwriter's Warrants to purchase
90,000 shares of Common Stock and/or 150,000 Class A Warrants and 90,000
Class B Warrants issued as a result of the anti-dilution provisions
contained in the Underwriter's Warrant Agreement), and (v) at the option of
the Company, Warrant Certificates in such form as may be
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approved by its Board of Directors, to reflect any adjustment or change in
the Purchase Price, the number of shares of Common Stock purchasable upon
exercise of the Warrants or the redemption price therefor made pursuant to
Section 8 hereof.
SECTION 3. Form and Execution of Warrant Certificates.
(a) The Warrant Certificates shall be substantially in the form annexed
hereto as Exhibit A (the provisions of which are hereby incorporated
herein) and may have such letters, numbers or other marks of identification
or designation and such legends, summaries or endorsements printed,
lithographed or engraved thereon as the Company may deem appropriate and as
are not inconsistent with the provisions of this Agreement, or as may be
required to comply with any law or with any rule or regulation made
pursuant thereto or with any rule or regulation of any stock exchange on
which Warrants may be listed, or to conform to usage. The Warrant
Certificates shall be dated the date of issuance thereof (whether upon
initial issuance, transfer, exchange or in lieu of mutilated, lost, stolen
or destroyed Warrant Certificates).
(b) Warrant Certificates shall be executed on behalf of the Company by its
Chairman of the Board, President or any Vice President and by its Treasurer
or an Assistant Treasurer or its Secretary or an Assistant Secretary, by
manual signatures or by facsimile signatures printed thereon, and shall
have imprinted thereon a facsimile of the Company's seal. Warrant
Certificates shall be manually countersigned. In case any officer of the
Company who shall have signed any of the Warrant Certificates shall cease
to be such officer of the Company before the date of issuance of the
Warrant Certificates or before countersignature by the Warrant Agent and
issue and delivery thereof, such Warrant Certificates, nevertheless, may be
countersigned by the Warrant Agent, issued and delivered with the same
force and effect as though the person who signed such Warrant Certificates
had not ceased to be such officer of the Company.
SECTION 4. Exercise.
(a) Warrants in denominations of one or whole number multiples thereof may
be exercised at any time commencing with the Initial Warrant Exercise Date,
and ending at the close of business on the Warrant Expiration Date, upon
the terms and subject to the conditions set forth herein
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(including the provisions set forth in Sections 5 and 9 hereof) and in the
applicable Warrant Certificate. A Warrant shall be deemed to have been
exercised immediately prior to the close of business on the Exercise Date,
provided that the Warrant Certificate representing such Warrant, with the
exercise form thereon duly executed by the Registered Holder thereof or his
attorney duly authorized in writing, together with payment in cash or by
check made payable to the Warrant Agent for the account of the Company, of
an amount in lawful money of the United States of America equal to the
applicable Purchase Price has been received in good funds by the Warrant
Agent. The person entitled to receive the securities deliverable upon such
exercise shall be treated for all purposes as the holder of such securities
as of the close of business on the Exercise Date. As soon as practicable on
or after the Exercise Date and in any event within five business days after
such date, the Warrant Agent on behalf of the Company shall cause to be
issued to the person or persons entitled to receive the same a Common Stock
certificate or certificates for the shares of Common Stock deliverable upon
such exercise, and the Warrant Agent shall deliver the same to the person
or persons entitled thereto. Upon the exercise of any Warrant, the Warrant
Agent shall promptly notify the Company in writing of such fact and of the
number of securities delivered upon such exercise and, subject to
subsection (b) below, shall cause all payments of an amount in cash or by
check made payable to the order of the Company, equal to the Purchase
Price, to be deposited promptly in the Company's bank account.
(b) At any time upon the exercise of any Warrants after 181 days from the
date hereof, the Warrant Agent shall, on a daily basis, within two business
days after such exercise, notify the Underwriter, and its successors or
assigns, of the exercise of any such Warrants and shall, on a
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weekly basis (subject to collection of funds constituting the tendered
Purchase Price, but in no event later than five business days after the
last day of the calendar week in which such funds were tendered), remit to
the Underwriter (so long as the Underwriter solicited the exercise of such
Warrant as indicated upon the Subscription Form attached to the Warrant
Certificate tendered for exercise), an amount equal to four percent (4%) of
the Purchase Price of such Warrants being then exercised unless (1) the
Underwriter shall have notified the Warrant Agent that the payment of such
amount with respect to such Warrant is violative of the General Rules and
Regulations promulgated under the Securities Exchange Act of 1934, as
amended, (the "Exchange Act"), or the rules and regulations of the National
Association of Securities Dealers, Inc. ("NASD") or applicable state
securities of "blue sky" laws, or (2) the Warrants are those underlying the
Underwriter's Warrants, or (3) the market price of the Common Stock on the
subject Exercise Date is lower than the Purchase Price, or (4) the Warrants
are held in a discretionary account, or (5) the Warrants are exercised in
an unsolicited transaction, in any of which events the Warrant Agent shall
pay such amount to the Company; provided that the Warrant Agent shall not
be obligated to pay any amounts pursuant to this Section 4(b) during any
week that such amounts payable are less than $1,000 and the Warrant Agent's
obligation to make such payments shall be suspended until the amount
payable aggregate $1,000, and provided further, that, in any event, any
such payment (regardless of amount) shall be made not less frequently than
monthly.
(c) The Company shall not be required to issue fractional shares upon the
exercise of Warrants. Warrants may only be exercised in such multiples as
are required to permit the issuance by the Company of one or more whole
shares. If one or more Warrants shall be presented for exercise in full at
the same time by the same Registered Holder, the number of whole shares
which shall be issuable upon such exercise thereof shall be computed on the
basis of the aggregate number of shares purchasable on exercise of the
Warrants so presented. If any fraction of a share would, except for the
provisions provided herein, be issuable on the exercise of any Warrant (or
specified portion thereof), the Company shall pay an amount in cash equal
to such fraction multiplied by the then current market value of a share of
Common Stock, determined as follows:
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(1) If the Common Stock is listed or admitted to unlisted trading
privileges on the New York Stock Exchange ("NYSE") or the American Stock
Exchange ("AMEX") or is traded on The Nasdaq National Market ("
Nasdaq/NM"), the current market value of a share of Common Stock shall be
the closing price of the Common Stock at the end of the regular trading
session on the last business day prior to the date of exercise of the
Warrants on whichever of such exchanges or Nasdaq/NM had the highest
average daily trading volume for the Common Stock on such day; or
(2) If the Common Stock is not listed or admitted to unlisted trading
privileges on either the NYSE or the AMEX and is not traded on Nasdaq/NM,
but is quoted or reported on Nasdaq, the current market value of a share of
Common Stock shall be the last sale price of the Common Stock at the end of
the regular trading session on the last business day prior to the date of
exercise of the Warrants as quoted or reported on Nasdaq, as the case may
be; or
(3) If the Common Stock is not listed or admitted to unlisted trading
privileges on either of the NYSE or the AMEX, and is not traded on
Nasdaq/NM or quoted or reported on Nasdaq, but is listed or admitted to
unlisted trading privileges on the BSE or other national securities
exchange (other than the NYSE or the AMEX), the current market value of a
share of Common Stock shall be the closing price of the Common Stock at the
end of the regular trading session on the last business day prior to the
date of exercise of the Warrants on whichever of such exchanges has the
highest average daily trading volume for the Common Stock on such day; or
(4) If the Common Stock is not listed or admitted to unlisted trading
privileges on
any national securities exchange, or listed for trading on Nasdaq/NM or
quoted or reported on Nasdaq, but is traded in the over-the-counter market,
the current market value of a share of Common Stock shall be the average of
the last reported bid and asked prices of the Common Stock reported by the
National Quotation Bureau, Inc. on the last business day prior to the date
of exercise of the Warrants; or
(5) If the Common Stock is not listed or
admitted to unlisted trading privileges on
any national securities exchange, or listed for trading on Nasdaq/NM or
quoted or reported on Nasdaq, and bid and asked prices of the Common Stock
are not reported by the National Quotation Bureau, Inc., the current market
value of a share of Common Stock shall be an amount, not less than
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the book value thereof as of the end of the most recently completed fiscal
quarter of the Company ending prior to the date of exercise, determined in
accordance with generally accepted accounting principles, consistently
applied.
SECTION 5. Reservation of Shares; Listing; Payment of Taxes; etc.
(a) The Company covenants that it will at all times reserve and keep
available out of its authorized Common Stock, solely for the purpose of
issue upon exercise of Warrants, such number of shares of Common Stock as
shall then be issuable upon the exercise of all outstanding Warrants. The
Company covenants that all shares of Common Stock which shall be issuable
upon exercise of the Warrants shall, at the time of delivery thereof, be
duly and validly issued and fully paid and nonassessable and free from all
preemptive or similar rights, taxes, liens and charges with respect to the
issue thereof, and that upon issuance such shares shall be listed on each
securities exchange, if any, on which the other shares of outstanding
Common Stock of the Company are then listed.
(b) The Company covenants that if any securities to be reserved for the
purpose of exercise of Warrants hereunder require registration with, or
approval of, any governmental authority under any federal securities law
before such securities may be validly issued or delivered upon such
exercise, then the Company will file a registration statement under the
federal securities laws or a post effective amendment, use its best efforts
to cause the same to become effective and use its best efforts to keep such
registration statement current while any of the Warrants are outstanding
and deliver a prospectus which complies with Section 10(a)(3) of the
Securities Act of 1933, as amended, (the "Act"), to the Registered Holder
exercising the Warrant (except, if in the opinion of counsel to the
Company, such registration is not required under the federal securities law
or if the Company receives a letter from the staff of the Securities and
Exchange Commission (the "Commission") stating that it would not take any
enforcement action if such registration is not effected). The Company will
use its best efforts to obtain appropriate approvals or registrations under
state "blue sky" securities laws. With respect to any such securities,
however, Warrants may not be exercised by, or shares of Common Stock issued
to, any Registered Holder in any state in which such exercise would be
unlawful.
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(c) The Company shall pay all documentary, stamp or similar taxes and other
governmental charges that may be imposed with respect to the issuance of
Warrants, or the issuance or delivery of any shares of Common Stock upon
exercise of the Warrants; provided, however, that if shares of Common Stock
are to be delivered in a name other than the name of the Registered Holder
of the Warrant Certificate representing any Warrant being exercised, then
no such delivery shall be made unless the person requesting the same has
paid to the Warrant Agent the amount of transfer taxes or charges incident
thereto, if any.
(d) The Warrant Agent is hereby irrevocably authorized as the Transfer
Agent to requisition from time to time certificates representing shares of
Common Stock or other securities required upon exercise of the Warrants,
and the Company will comply with all such requisitions.
SECTION 6. Exchange and Registration of Transfer.
(a) Warrant Certificates may be exchanged for other Warrant Certificates
representing an equal aggregate number of Warrants or may be transferred in
whole or in part. Warrant Certificates to be so exchanged shall be
surrendered to the Warrant Agent at its Corporate Office, and the Company
shall execute and the Warrant Agent shall countersign, issue and deliver in
exchange therefor the Warrant Certificate or Certificates which the
Register Holder making the exchange shall be entitled to receive.
(b) The Warrant Agent shall keep, at such office, books in which, subject
to such reasonable regulations as it may prescribe, it shall register
Warrant Certificates and the transfer thereof. Upon due presentment for
registration of transfer of any Warrant Certificate at such office, the
Company shall execute and the Warrant Agent shall issue and deliver to the
transferee or transferees a new Warrant Certificate or Certificates
representing an equal aggregate number of Warrants.
(c) With respect to any Warrant Certificates presented for registration of
transfer, or for exchange or exercise, the subscription or exercise form,
as the case may be, on the reverse thereof shall be duly endorsed or be
accompanied by a written instrument or instruments or transfer and
subscription, in form satisfactory to the Company and the Warrant Agent,
duly executed by the Registered Holder thereof or his attorney duly
authorized in writing.
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(d) No service charge shall be made for any exchange or registration of
transfer of Warrant Certificates. However, the Company may require payment
of a sum sufficient to cover any tax or other governmental charge that may
be imposed in connection therewith.
(e) All Warrant Certificates surrendered for exercise or for exchange shall
be promptly canceled by the Warrant Agent.
(f) Prior to due presentment for registration or transfer thereof, the
Company and the Warrant Agent may deem and treat the Registered Holder of
any Warrant Certificate as the absolute owner thereof of each Warrant
represented thereby (notwithstanding any notations of ownership or writing
thereon made by anyone other than the Company or the Warrant Agent) for all
purposes and shall not be affected by any notice to the contrary.
SECTION 7. Loss or Mutilation. Upon receipt by the Company and the Warrant
Agent of evidence satisfactory to them of the ownership of and the loss,
theft, destruction or mutilation of any Warrant Certificate and (in the
case of loss, theft or destruction) of indemnity satisfactory to them, and
(in case of mutilation) upon surrender and cancellation thereof, the
Company shall execute and the Warrant Agent shall countersign and deliver
in lieu thereof a new Warrant Certificate representing an equal aggregate
number of Warrants. Applicants for a substitute Warrant Certificate shall
also comply with such other reasonable regulations and pay such other
reasonable charges as the Warrant Agent may prescribe.
SECTION 8. Adjustment of Purchase Price and Number of Shares of Common
Stock Deliverable.
(a)(i) Except as hereinafter provided, in the event the Company shall, at
any time or from time to time after the date hereof, issue any shares of
Common Stock for a consideration per share less than the "Fair Market
Value" (as defined in Section 8(g)) or issue any shares of Common Stock as
a stock dividend to the holders of Common Stock, or subdivide or combine
the outstanding shares of Common Stock into a greater or lesser number of
shares (any such issuance, subdivision or combination being herein called a
"Change of Shares"), then, and thereafter upon each further
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Change of Shares, the Purchase Price for the Warrants (whether or not the
same shall be issued and outstanding) in effect immediately prior to such
Change of Shares shall be changed to a price (including any applicable
fraction of a cent to the nearest cent) determined by dividing (i) the sum
of (a) the total number of shares of Common Stock outstanding immediately
prior to such Change of Shares, multiplied by the Purchase Price in effect
immediately prior to such Change of Shares and (b) the consideration, if
any, received by the Company upon such sale, issuance, subdivision or
combination, by (ii) the total number of shares of Common Stock outstanding
immediately after such Change of Shares; For the purposes of any adjustment
to be made in accordance with this Section 8(a), the
following provisions shall be applicable:
(A) In case of the issuance or sale of shares of Common Stock (or of other
securities deemed hereunder to involve the issuance or sale of shares of
Common Stock) for a consideration part or all of which shall be cash, the
amount of the cash portion of the consideration therefor deemed to have
been received by the Company shall be (i) the subscription price, if shares
of Common Stock are offered by the Company for subscription, or (ii) the
public offering price (before deducting therefrom any compensation paid or
discount allowed in the sale, underwriting or purchase thereof by
underwriters or dealers or others performing similar services, or any
expenses incurred in connection therewith), if such securities are sold to
underwriters or dealers for public offering without a subscription
offering, or (iii) the gross amount of cash actually received by the
Company for such securities, in any other case, in each case, without
deduction for any expenses incurred by the Company in connection with such
transaction.
(B) In case of the issuance or sale (other than as a dividend or other
distribution on any stock of the Company) of shares of Common Stock (or of
other securities deemed hereunder to involve the issuance or sale of shares
of Common Stock) for a consideration part or all of which shall be other
than cash, the amount of the consideration therefor other than cash deemed
to have been received by the Company shall be the value of such
consideration as determined in good faith by the Board of Directors of the
Company on the basis of a record of values of similar property or services.
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(C) Shares of Common Stock issuable by way of dividend or other
distribution on any stock of the Company shall be deemed to have been
issued immediately after the opening of business on the day following the
record date for the determination of shareholders entitled to receive such
dividend or other distribution and shall be deemed to have been issued at
par value.
(D) The reclassification of securities of the Company other than shares of
Common Stock into securities including shares of Common Stock shall be
deemed to involve the issuance of such shares of Common Stock for a
consideration other than cash immediately prior to the close of business on
the date fixed for the determination of security holders entitled to
receive such shares, and the value of the consideration allocable to such
shares of Common Stock shall be determined as provided in subsection (B) of
this Section 8(a).
(E) The number of shares of Common Stock at any time outstanding shall be
deemed to include the aggregate maximum number of shares issuable (subject
to readjustment upon the actual issuance thereof) upon the exercise of
options, rights or warrants and upon the conversion or exchange of
convertible or exchangeable securities.
(ii) Upon each adjustment of the Purchase Price pursuant to this Section 8,
the number of shares of Common Stock purchasable upon the exercise of each
Warrant shall be the number derived by multiplying the number of shares of
Common Stock purchasable immediately prior to such adjustment by the
Purchase Price in effect prior to such adjustment and dividing the product
so obtained by the applicable adjusted Purchase Price.
(b) In case the Company shall at any time after the date hereof issue
options, rights or warrants to subscribe for shares of Common Stock, or
issue any securities convertible into or exchangeable for shares of Common
Stock, for a consideration per share (determined as provided in Section
8(a)(i) and as provided below) less than the Fair Market Value in effect
immediately prior to the issuance of such options, rights or warrants, or
such convertible or exchangeable securities, or without consideration
(including the issuance of any such securities by way of dividend or other
distribution), the Purchase Price for the Warrants (whether or not the same
shall be issued and outstanding) in effect immediately prior to the
issuance of such options, rights or warrants, or such
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convertible or exchangeable securities, as the case may be, shall be
reduced to a price determined by making the computation in accordance with
the provisions of Section 8(a)(i) hereof, provided that:
(A) The aggregate maximum number of shares of Common Stock, as the case may
be, issuable or that may become issuable under such options, rights or
warrants (assuming exercise in full even if not then currently exercisable
or currently exercisable in full) shall be deemed to be issued and
outstanding at the time such options, rights or warrants were issued, for a
consideration equal to the minimum purchase price per share provided for in
such options, rights or warrants at the time of issuance, plus the
consideration, if any, received by the Company for such options, rights or
warrants; provided, however, that upon the expiration or other termination
of such options, rights or warrants, if any thereof shall not have been
exercised, the number of shares of Common Stock deemed to be issued and
outstanding pursuant to this subsection (A) (and for the purposes of
subsection (E) of Section 8(a)(i) hereof) shall be reduced by the number of
shares as to which options, warrants and/or rights shall have expired, and
such number of shares shall no longer be deemed to be issued and
outstanding, and the Purchase Price then in effect shall forthwith be
readjusted and thereafter be the price that it would have been had
adjustment been made on the basis of the issuance only of the shares
actually issued plus the shares remaining issuable upon the exercise of
those options, rights or warrants as to which the exercise rights shall not
have expired or terminated unexercised.
(B) The aggregate maximum number of shares of Common Stock issuable or that
may become issuable upon conversion or exchange of any convertible or
exchangeable securities (assuming conversion or exchange in full even if
not then currently convertible or exchangeable in full) shall be deemed to
be issued and outstanding at the time of issuance of such securities, for a
consideration equal to the consideration received by the Company for such
securities, plus the minimum consideration, if any, receivable by the
Company upon the conversion or exchange thereof; provided, however, that
upon the termination of the right to convert or exchange such convertible
or exchangeable securities (whether by reason of redemption or otherwise),
the number of shares of Common Stock deemed to be issued and outstanding
pursuant to this subsection (B)
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(and for the purposes of subsection (E) of Section 8(a)(i) hereof) shall be
reduced by the number of shares as to which the conversion or exchange
rights shall have expired or terminated unexercised, and such number of
shares shall no longer be deemed to be issued and outstanding, and the
Purchase Price then in effect shall forthwith be readjusted and thereafter
be the price that it would have been had adjustment been made on the basis
of the issuance only of the shares actually issued plus the shares
remaining issuable upon conversion or exchange of those convertible or
exchangeable securities as to which the conversion or exchange rights shall
not have expired or terminated unexercised.
(C) If any change shall occur
in the price per share provided for in any of the options, rights or
warrants referred to in subsection (A) of this Section 8(b), or in the
price per share or ratio at which the securities referred to in subsection
(B) of this Section 8(b) are convertible or exchangeable, such options,
rights or warrants or conversion or exchange rights, as the case may be, to
the extent not theretofore exercised, shall be deemed to have expired or
terminated on the date when such price change became effective in respect
of shares not theretofore issued pursuant to the exercise or conversion or
exchange thereof, and the Company shall be deemed to have issued upon such
date new options, rights or warrants or convertible or exchangeable
securities. (c) In case of any reclassification or change of outstanding
shares of Common Stock issuable
upon exercise of the Warrants (other than a change in par value, or from
par value to no par value, or from no par value to par value or as a result
of a subdivision or combination), or in case of any consolidation or merger
of the Company with or into another corporation (other than a merger with a
Subsidiary in which merger the Company is the continuing corporation and
which does not result in any reclassification or change of the then
outstanding shares of Common Stock or other capital stock issuable upon
exercise of the Warrants (other than a change in par value, or from par
value to no par value, or from no par value to par value or as a result of
subdivision or combination)) or in case of any sale or conveyance to
another corporation of the property of the Company as an entirety or
substantially as an entirety, then, as a condition of such
reclassification, change, consolidation, merger, sale or conveyance, the
Company, or such successor or purchasing corporation, as the case may be,
shall make lawful and adequate provision whereby the Registered Holder of
each Warrant
15
then outstanding shall have the right thereafter to receive on exercise of
such Warrant the kind and amount of securities and property receivable upon
such reclassification, change, consolidation, merger, sale or conveyance by
a holder of the number of securities issuable upon exercise of such Warrant
immediately prior to such reclassification, change, consolidation, merger,
sale or conveyance and shall forthwith file at the Corporate Office of the
Warrant Agent a statement signed by its President or a Vice President and
by its Treasurer or an Assistant Treasurer or its Secretary or an Assistant
Secretary evidencing such provision. Such provisions shall include
provision for adjustments which shall be as nearly equivalent as may be
practicable to the adjustments provided for in Section 8(a) and (b). The
above provisions of this Section 8(c) shall similarly apply to successive
reclassifications and changes of shares of Common Stock and to successive
consolidations, mergers, sales or conveyances.
(d) Irrespective of any adjustments or changes in the Purchase Price or the
number of shares of Common Stock purchasable upon exercise of the Warrants,
the Warrant Certificates theretofore and thereafter issued shall, unless
the Company shall exercise its option to issue new Warrant Certificates
pursuant to Section 2(e) hereof, continue to express the Purchase Price per
share and the number of shares purchasable thereunder as the Purchase Price
per share and the number of shares purchasable thereunder were expressed in
the Warrant Certificates when the same were originally issued.
(e) After each adjustment of the Purchase Price pursuant to this Section 8,
the Company will promptly prepare a certificate signed by the Chairman or
President, and by the Treasurer or an Assistant Treasurer or the Secretary
or an Assistant Secretary, of the Company setting forth: (i) the Purchase
Price as so adjusted, (ii) the number of shares of Common Stock purchasable
upon exercise of each Warrant, after such adjustment, and (iii) a brief
statement of the facts accounting for such adjustment. The Company will
promptly file such certificate with the Warrant Agent and cause a brief
summary thereof to be sent by ordinary first class mail to each Registered
Holder at his last address as it shall appear on the registry books of the
Warrant Agent. No failure to mail such notice nor any defect therein or in
the mailing thereof shall affect the validity thereof except as the holder
to whom the Company failed to mail such notice, or except as to the holder
whose notice was
16
defective. The affidavit of an officer of the Warrant Agent or the
Secretary or an Assistant Secretary of the Company that such notice has
been mailed shall, in the absence of fraud, be prima facie evidence of the
facts stated therein.
(f) No adjustment of the Purchase Price shall be made as a result of or in
connection with (A) the issuance of shares of Common Stock underlying the
Warrants or the units issuable upon exercise of the Underwriter's Warrants
pursuant to the Underwriter's Warrant Agreement, or (B) the issuance or
sale of shares of Common Stock if the amount of said adjustment shall be
less than $.10, provided, however, that in such case, any adjustment that
would otherwise be required then to be made shall be carried forward and
shall be made at the time of and together with the next subsequent
adjustment that shall amount, together with any adjustment so carried
forward, to at least $.10. In addition, Registered Holders shall not be
entitled to cash dividends paid by the Company prior to the exercise of any
Warrant or Warrants held by them.
(g) "Fair Market Value" shall mean the value of a share of Common Stock as
determined in accordance with the following provisions:
(1) If the Common Stock is listed or admitted to unlisted trading
privileges on the NYSE or the AMEX or is traded on the Nasdaq/NM, the Fair
Market Value of a share of Common Stock shall be equal to the average of
the closing price of the Common Stock during the thirty (30) trading days
immediately preceding the date of the event which requires the
determination of Fair Market Value on whichever of such exchanges or
Nasdaq/NM had the total highest daily trading volume for the Common Stock
during such thirty (30) day trading period.
(2) If the Common Stock is not listed or admitted to unlisted trading
privileges on either the NYSE or the AMEX and is not traded on Nasdaq/NM,
but is quoted or reported on Nasdaq, the Fair Market Value of a share of
Common Stock shall be the last reported price of the Common Stock during
the thirty (30) trading days immediately preceding the date of event which
requires the determination of Fair Market Value.
(3) If the Common Stock is not listed or admitted to unlisted trading
privileges on either of the NYSE or the AMEX and is not traded on Nasdaq/NM
or quoted or reported on Nasdaq, but is listed or admitted to unlisted
trading privileges on the BSE or another national securities
17
exchange (other than the NYSE or the AMEX), the Fair Market Value of a
share of Common Stock shall be the last reposted closing price of the
Common Stock during the thirty (30) trading days immediately preceding the
date of the event which requires the determination of Fair Market Value.
(4) If the Common Stock is not listed or admitted to unlisted trading
privileges on any national securities exchange, or listed for trading on
Nasdaq/NM or quoted or reported on Nasdaq, but is traded in the
over-the-counter market, the Fair Market Value of a share of Common Stock
shall be the average of the average of the last reported bid and asked
prices of the Common Stock reported by the National Quotation Bureau, Inc.
for the thirty (30) trading days immediately preceding the date of the
event which requires the determination of Fair Market Value.
(5) If the Common Stock is not listed or admitted to unlisted trading
privileges on any national securities exchange, or listed for trading on
Nasdaq/NM or quoted or reported on Nasdaq, and bid and asked prices of the
Common Stock are not reported by the National Quotation Bureau, Inc., the
Fair Market Value of a share of Common Stock shall be an amount, not less
than the book value thereof as of the end of the most recently completed
fiscal quarter of the company ending prior to the date requiring a
determination of fair market value, determined in accordance with general
accepted accounting principles, consistently applied.
SECTION 9. Redemption.
(a) Commencing on the Initial Warrant Redemption Date, the Company may, on
30 days' prior written notice redeem all the Warrants, other than the
Warrants underlying the Underwriter's Warrants which shall not be
redeemable, at ten cents ($.10) per Warrant, provided, however, that before
any such call for redemption of Class A Warrants can take place the closing
sale price of the Common Stock as quoted on the principal market on which
such shares shall then be trading, shall have, for only twenty (20) trading
days within a period of thirty (30) consecutive trading days ending on the
fifth (5th) day prior to the date on which the notice contemplated by (b)
and (c) below is given, equalled or exceeded $6.25 per share (subject to
adjustment in the event of any stock splits or other similar events as
provided in Section 8 hereof), and before any such call for redemption of
Class B Warrants can take place the closing sale price of the Common Stock
as quoted on the
18
principal market on which such shares shall then be trading, shall have,
for only twenty (20) trading days within a period of thirty (30)
consecutive trading days ending on the fifth (5th) day prior to the date on
which the notice contemplated by (b) and (c) below is given, equalled or
exceeded $7.25 per share (subject to adjustment in the event of any stock
splits or other similar events as provided in Section 8 hereof).
(b) In case the Company shall exercise its right to redeem all of the Class
A or Class B Warrants so redeemable, it shall give or cause notice to such
effect to be given to the Underwriter in the same manner that notice is
required to be given by the Underwriter's Warrant Agreement. The
Underwriter may, at its option, solicit exercises of the Warrants. In the
event that the Underwriter does not commence solicitation of exercises of
the Warrants within thirty (30) days of notice from the Company, the
Company may give notice of redemption to the Registered Holders of the
Warrants by mailing to such Registered Holders a notice of redemption,
first class, postage prepaid, at their last address as shall appear on the
records of the Warrant Agent. Any notice mailed in the manner provided
herein shall be conclusively presumed to have been duly given whether or
not the Registered Holder receives such notice. Not less than five business
days prior to the mailing to the Registered Holders of the Warrants of the
notice of redemption, the Company shall deliver or cause to be delivered to
the Underwriter a similar notice telephonically and confirmed in writing
together with a list of the Registered Holders (including their respective
addresses and number of Warrants beneficially owned) to whom such notice of
redemption has been or will be given.
(c) The notice of redemption shall specify (i) the redemption price, (ii)
the date fixed for redemption, which shall in no event be less than thirty
(30) days after the date of mailing of such notice, (iii) the place where
the Warrant Certificate shall be delivered and the redemption price shall
be paid, (iv) that the Underwriter is the Company's warrant solicitation
agent and may receive the commission contemplated by Section 4(b) hereof,
and (v) that the right to exercise the Warrant shall terminate at 5:00 p.m.
(New York time) on the business day immediately preceding the date fixed
for redemption. The date fixed for the redemption of the Warrants shall be
the Redemption Date. No failure to mail such notice nor any defect therein
or in the mailing thereof shall affect the validity of the proceedings for
such redemption except as to a holder (a) to whom notice was not mailed or
19
(b) whose notice was defective. An affidavit of the Warrant Agent or the
Secretary or Assistant Secretary of the Company that notice of redemption
has been mailed shall, in the absence of fraud, be prima facie evidence of
the facts stated therein.
(d) Any right to exercise a Warrant shall terminate at 5:00 p.m. (New York
time) on the business day immediately preceding the Redemption Date. The
redemption price payable to the Registered Holders shall be mailed to such
persons at their addresses of record.
(e) The Company shall indemnify the Underwriter and each person, if any,
who controls the Underwriter within the meaning of Section 15 of the Act or
Section 20(a) of the Exchange Act against all loss, claim, damage, expense
or liability (including all expenses reasonably incurred in investigating,
preparing or defending against any claim whatsoever) to which any of them
may become subject under the Act, the Exchange Act or otherwise, arising
from the registration statement or prospectus referred to in Section 5(b)
hereof to the same extent and with the same effect (including the
provisions regarding contribution) as the provisions pursuant to which the
Company has agreed to indemnify the Underwriters contained in Section 7 of
the Underwriting Agreement.
(f) Five business days prior to the Redemption Date, the Company shall
furnish to the Underwriter (i) an opinion of counsel to the Company, dated
such date and addressed to Underwriter, and (ii) a "cold comfort" letter
dated such date addressed to the Underwriter, signed by the independent
public accountants who have issued a report on the Company's financial
statements included in such registration statement, in each case covering
substantially the same matters with respect to such registration statement
(and the prospectus included therein) and, in the case of such accountants'
letter, with respect to events subsequent to the date of such financial
statements, as are customarily covered in opinions of issuer's counsel and
in accountants' letters delivered to underwriters in underwritten public
offerings of securities.
(g) The Company shall as soon as practicable after the Redemption Date, and
in any event within 15 months thereafter, make "generally available to its
security holders" (within the meaning of Rule 158 under the Act) an
earnings statement (which need not be audited) complying with Section 11(a)
of the Act and covering a period of at least 12 consecutive months
beginning after the Redemption Date.
20
(h) The Company shall deliver within five business days prior to the
Redemption Date copies of all correspondence between the Commission and the
Company, its counsel or auditors and all memoranda relating to discussions
with the Commission or its staff with respect to such registration
statement and permit the Underwriter to do such investigation, upon
reasonable advance notice, with respect to information contained in or
omitted from the registration statement as it deems reasonably necessary to
comply with applicable securities laws or rules of the NASD. Such
investigation shall include access to books, records and properties and
opportunities to discuss the business of the Company with its officers and
independent auditors, all to such reasonable extent and at such reasonable
times and as often as the Underwriter shall reasonably request.
SECTION 10. Concerning the Warrant Agent.
(a) The Warrant Agent acts hereunder as agent and in a ministerial capacity
for the Company and the Underwriter, and its duties shall be determined
solely by the provisions hereof. The Warrant Agent shall not, by issuing
and delivering Warrant Certificates or by any other act hereunder, be
deemed to make any representations as to the validity or value or
authorization of the Warrant Certificates or the Warrants represented
thereby or of any securities or other property delivered upon exercise of
any Warrant or whether any stock issued upon exercise of any Warrant is
fully paid and nonassessable.
(b) The Warrant Agent shall not at any time be under any duty or
responsibility to any holder of Warrant Certificates to make or cause to be
made any adjustment of the Purchase Price provided in this Agreement, or to
determine whether any fact exists which may require any such adjustment, or
with respect to the nature or extent of any such adjustment, when made, or
with respect to the method employed in making the same. It shall not (i) be
liable for any recital or statement of fact contained herein or for any
action taken, suffered or omitted by it in reliance on any Warrant
Certificate or other document or instrument believed by it in good faith to
be genuine and to have been signed or presented by the proper party or
parties, (ii) be responsible for any failure on the part of the Company to
comply with any of its covenants and obligations contained in this
Agreement
21
or in any Warrant Certificate, or (iii) be liable for any act or omission
in connection with this Agreement except for its own gross negligence or
willful misconduct.
(c) The Warrant Agent may at any time consult with counsel satisfactory to
it (who may be counsel for the Company) and shall incur no liability or
responsibility for any action taken, suffered or omitted by it in good
faith in accordance with the opinion or advice of such counsel.
(d) Any notice, statement, instruction, request, direction, order or demand
of the Company shall be sufficiently evidenced by an instrument signed by
the Chairman of the Board of Directors, President or any Vice President
(unless other evidence in respect thereof is herein specifically
prescribed). The Warrant Agent shall not be liable for any action taken,
suffered or omitted by it in accordance with such notice, statement,
instruction, request, direction, order or demand.
(e) The Company agrees to pay the Warrant Agent reasonable compensation for
its services hereunder and to reimburse it for its reasonable expenses
hereunder; the Company further agrees to indemnify the Warrant Agent and
save it harmless against any and all losses, expenses and liabilities,
including judgments, costs and counsel fees, for anything done or omitted
by the Warrant Agent in the execution of its duties and powers hereunder
except losses, expenses and liabilities arising as a result of the Warrant
Agent's gross negligence or willful misconduct.
(f) The Warrant Agent may resign its duties and be discharged from all
further duties and liabilities hereunder (except liabilities arising as a
result of the Warrant Agent's own gross negligence or willful misconduct),
after giving 30 days' prior written notice to the Company. At least 15 days
prior to the date such resignation is to become effective, the Warrant
Agent shall cause a copy of such notice of resignation to be mailed to the
Registered Holder of each Warrant Certificate at the Company's expense.
Upon such resignation the Company shall appoint in writing a new warrant
agent. If the Company shall fail to make such appointment within a period
of 30 days after it has been notified in writing of such resignation by the
resigning Warrant Agent, then the Registered Holder of any Warrant
Certificate may apply to any court of competent jurisdiction for the
appointment of a new warrant agent. Any new warrant agent, whether
appointed by the Company or by such a court, shall be a bank or trust
company having a capital and surplus, as shown by its last published report
to its stockholders, of not less than $10,000,000 or a stock transfer
22
company doing business in Massachusetts or New York. After acceptance in
writing of such appointment by the new warrant agent is received by the
Company, such new warrant agent shall be vested with the same powers,
rights, duties and responsibilities as if it had been originally named
herein as the warrant agent, without any further assurance, conveyance, act
or deed; but if for any reason it shall be necessary or expedient to
execute and deliver any further assurance, conveyance, act or deed, the
same shall be done at the expense of the Company and shall be legally and
validly executed and delivered by the resigning Warrant Agent. Not later
than the effective date of any such appointment the Company shall file
notice thereof with the resigning Warrant Agent and shall forthwith cause a
copy of such notice to be mailed to the Registered Holder of each Warrant
Certificate.
(g) Any corporation into which the Warrant Agent or any new warrant agent
may be converted or merged, any corporation resulting from any
consolidation to which the Warrant Agent or any new warrant agent shall be
a party, or any corporation succeeding to the corporate trust business of
the Warrant Agent or any new warrant agent shall be a successor warrant
agent under this Agreement without any further act, provided that such
corporation is eligible for appointment as successor to the Warrant Agent
under the provisions of the preceding paragraph. Any such successor warrant
agent shall promptly cause notice of its succession as warrant agent to be
mailed to the Company and to the Registered Holders of each Warrant
Certificate.
(h) The Warrant Agent, its subsidiaries and affiliates, and any of its or
their officers or directors, may buy and hold or sell Warrants or other
securities of the Company and otherwise deal with the Company in the same
manner and to the same extent and with like effect as though it were not
Warrant Agent. Nothing herein shall preclude the Warrant Agent from acting
in any other capacity for the Company or for any other legal entity.
(i) The Warrant Agent shall retain for a period of two years from the date of
exercise any Warrant Certificate received by it upon such exercise.
SECTION 11. Modification of Agreement.
23
The Warrant Agent and the Company may by supplemental agreement make any
changes or corrections in this Agreement (i) that they shall deem
appropriate to cure any ambiguity or to correct any defective or
inconsistent provision or manifest mistake or error herein contained; (ii)
to reflect an increase in the number of Warrants which are to be governed
by this Agreement resulting from a subsequent public offering of Company
securities which includes warrants having the same terms and conditions as
the Warrants originally covered by or subsequently added to this Agreement
under this Section 11; or (iii) that they may deem necessary or desirable
and which shall not adversely affect the interests of the holders of
Warrant Certificates; provided, however, that this Agreement shall not
otherwise be modified, supplemented or altered in any respect except with
the consent in writing of the Registered Holders representing not less that
66-2/3% of the Warrants then outstanding (including, for this purpose
Warrants issuable to the Underwriter pursuant to the Underwriter's
Warrants, whether or not then outstanding); provided, further, that no
change in the number or nature of the securities purchasable upon the
exercise of any Warrant, or to increase the Purchase Price therefor, shall
be made without the consent in writing of the Registered Holder of the
Warrant Certificate, other than such changes as are specifically prescribed
by this Agreement as originally executed. In addition, this Agreement may
not be modified, amended or supplemented without the prior written consent
of the Underwriter, other than to cure any ambiguity or to correct any
provision which is inconsistent with any other provision of this Agreement
or to make any such change that is necessary or desirable and which shall
not adversely affect the interests of the Underwriter and except as may be
required by law.
SECTION 12. Notices.
All notices, requests, consents and other communications hereunder shall be
in writing and shall be deemed to have been made when delivered or mailed
first-class postage prepaid, or delivered to a telegraph office for
transmission if to the Registered Holder of a Warrant Certificate, at the
address of such holder as shown on the registry books maintained by the
Warrant Agent; if to the Company at Genisys Reservation Systems, Inc., ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇
▇▇▇▇▇▇▇, President, or at such other address as may have been furnished
24
to the Warrant Agent in writing by the company; and if to the Warrant
Agent, at its Corporate Office. Copies of any notice delivered pursuant to
this Agreement shall be delivered to ▇.▇. ▇▇▇▇▇ at ▇.▇. ▇▇▇▇▇ & Co., Inc.,
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇
▇▇▇▇▇▇▇, with a copy to Scheichet & ▇▇▇▇▇, P.C., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, or at such
other address as may have been furnished to the Company and the Warrant
Agent in writing.
SECTION 13. Construction.
This Agreement shall be governed by and construed in accordance with the
laws of the State of New York without giving effect to conflicts of laws.
SECTION 14. Binding Effect.
This Agreement shall be binding upon and inure to the benefit of the
Company, the Warrant Agent and their respective successors and assigns and
the holders from time to time of Warrant Certificates or any of them.
Except as hereinafter stated, nothing in this Agreement is intended or
shall be construed to confer upon any other person any right, remedy or
claim or to impose upon any other person any duty, liability or obligation.
The Underwriters (as defined in the Underwriting Agreement) are, and shall
at all times irrevocably be deemed to be, third-party beneficiaries of this
Agreement, with full power, authority and standing to enforce the rights
granted to it hereunder.
SECTION 15. Counterparts.
This Agreement may be executed in several counterparts, which taken
together shall constitute a single document.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the first date first above written.
25
GENISYS RESERVATION SYSTEMS, INC. CONTINENTAL STOCK TRANSFER
AND TRUST COMPANY
By: By:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, President
26
EXHIBIT A
No. Class A W VOID AFTER ____________, 2001
____________ CLASS A WARRANTS
CLASS A REDEEMABLE WARRANT CERTIFICATE
TO PURCHASE ONE SHARE OF COMMON STOCK
GENISYS RESERVATION SYSTEMS, INC.
CUSIP __________
THIS CERTIFIES THAT, FOR VALUE RECEIVED
or registered assigns (the "Registered Holder") is the owner of the number
of Redeemable Warrants (the "Warrants") specified above. Each Warrant
initially entitles the Registered Holder to purchase, subject to the terms
and conditions set forth in this Certificate and the Warrant Agreement (as
hereinafter defined), one fully paid and nonassessable share of Common
Stock, $.0001 par value, of Genisys Reservation Systems, Inc., a New Jersey
corporation (the "Company"), at any time between , 1997 (the "Initial
Warrant Exercise Date"), and the Expiration Date (as hereinafter defined)
upon the presentation and surrender of this Warrant Certificate with the
Subscription Form on the reverse hereof duly executed, at the corporate
office of Continental Stock Transfer and Trust Company, ▇ ▇▇▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, as Warrant Agent, or its successor (the "Warrant
Agent"), accompanied by payment of $5.75 subject to adjustment (the
"Purchase Price"), in lawful money of the United States of America in cash
or by check made payable to the Warrant Agent for the account of the
Company.
This Warrant Certificate and each Warrant represented hereby are issued
pursuant to and are subject in all respects to the terms and conditions set
forth in the Redeemable Warrant Agreement (the "Warrant Agreement"), dated
________________, 1997, by and between the Company and the Warrant Agent.
In the event of certain contingencies provided for in the Warrant
Agreement, the Purchase Price and the number of shares of Common Stock
subject to purchase upon the exercise of each Warrant represented hereby
are subject to modification or adjustment.
Each Warrant represented hereby is exercisable at the option of the
Registered Holder, but no fractional interests will be issued. In the case
of the exercise of less than all the Warrant represented hereby, the
Company shall cancel this Warrant Certificate upon the surrender hereof and
27
shall execute and deliver a new Warrant Certificate or Warrant Certificates
of like tenor, which the Warrant Agent shall countersign, for the balance
of such Warrants.
The term "Expiration Date" shall mean 5:00 p.m. (New York time) on , 2001.
If each such date shall in the State of New York be a holiday or a day on
which the banks are authorized to close, then the Expiration Date shall
mean 5:00 p.m. (New York time) the next following day which in the State of
New York is not a holiday or a day on which banks are authorized to close.
The Company shall not be obligated to deliver any securities pursuant to
the exercise of this Warrant unless a registration statement under the
Securities Act of 1933, as amended (the "Act), with respect to such
securities is effective or an exemption thereunder is available. The
Company has covenanted and agreed that it will file a registration
statement under the Federal securities laws, use its best efforts to cause
the same to become effective, use its best efforts to keep such
registration statement current, if required under the Act, while any of the
Warrants are outstanding, and deliver a prospectus which complies with
Section 10(a)(3) of the Act to the Registered Holder exercising this
Warrant. This Warrant shall not be exercisable by a Registered Holder in
any state where such exercise would be unlawful.
This Warrant Certificate is exchangeable, upon the surrender hereof by the
Registered Holder at the corporate office of the Warrant Agent, for a new
Warrant Certificate or Warrant Certificates of like tenor representing an
equal aggregate number of Warrants, each of such new Warrant Certificates
to represent such number of Warrants as shall be designated by such
Registered Holder at the time of such surrender. Upon due presentment and
payment of any tax or other charge imposed in connection therewith or
incident thereto, for registration of transfer of this Warrant Certificate
at such office, a new Warrant Certificate of Warrant Certificates
representing an equal aggregate number of Warrants will be issued to the
transferee in exchange therefor, subject to the limitations provided in the
Warrant Agreement.
Prior to the exercise of any Warrant represented hereby, the Registered
Holder shall not be entitled to any rights of a stockholder of the Company,
including, without limitation, the right to vote or to receive dividends or
other distributions, and shall not be entitled to receive any notice of any
proceedings of the Company, except as provided in the Warrant Agreement.
Subject to the provisions of the Warrant Agreement, this Warrant may be
redeemed at the option of the Company, at a redemption price of $.10 per
Warrant, at any time commencing six (6) months after the Initial Warrant
Exercise Date, provided that (i) the closing bid price for the Common Stock
is reported by The Nasdaq Stock Market, Inc. ("Nasdaq"), if the Common
Stock is then traded in the over-the-counter market or (ii) the closing
sale price, if the Common Stock is then traded on Nasdaq/NM or a national
securities exchange, shall have equalled or exceeded for any twenty (20)
trading days within a period of thirty (30) consecutive trading days ending
on the fifth (5th) day prior to the Notice of Redemption, as defined below,
$6.25 per share (subject to adjustment in the event of any stock splits or
other similar events). Notice of redemption (the "Notice of
28
Redemption") shall be given not later than the thirtieth day before the
date fixed for redemption, all as provided in the Warrant Agreement. On and
after the date fixed for redemption, the Registered Holder shall have no
rights with respect to the Warrants except to receive the $.10 per Warrant
upon surrender of this Warrant Certificate.
Under certain circumstances, ▇.▇. ▇▇▇▇▇ & Co., Inc. collectively shall be
entitled to receive an aggregate of four percent (4%) of the Purchase Price
of the Warrants represented hereby.
Prior to due presentment for registration of transfer hereof, the Company
and the Warrant Agent may deem and treat the Registered Holder as the
absolute owner hereof and of each Warrant represented hereby
(notwithstanding any notations of ownership or writing hereon made by
anyone other than a duly authorized officer of the Company or the Warrant
Agent) for all purposes and shall not be affected by any notice to the
contrary, except as provided in the Warrant Agreement.
This Warrant Certificate shall be governed by and construed in accordance
with the laws of the State of New York without giving effect to conflicts
of laws.
This Warrant Certificate is not valid unless countersigned by the Warrant
Agent.
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be
duly executed, manually or in facsimile by two of its officers thereunto
duly authorized and a facsimile of its corporate seal to be imprinted
hereon.
Dated: ________________, 1997
[SEAL] GENISYS RESERVATION SYSTEMS, INC.
By: _____________________________
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, President
By: _____________________________
▇▇▇▇ ▇▇▇▇▇, Secretary
COUNTERSIGNED:
CONTINENTAL STOCK TRANSFER
AND TRUST COMPANY
as Warrant Agent
By: _____________________
29
Name: _____________________
Title: ____________________
SUBSCRIPTION FORM
To Be Executed by the Registered Holder
in Order to Exercise Warrants
The undersigned Registered Holder hereby irrevocably elects to exercise
Warrants represented by this Warrant Certificate, and to purchase the
securities issuable upon the exercise of such Warrants, and requests that
certificates for such securities shall be issued in name of
PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
(please print or type name and address)
and be delivered to
(please print or type name and address)
and if such number of Warrants shall not be all the Warrants evidenced by
this Warrant Certificate, that a new Warrant Certificate for the balance of
such Warrants be registered in the name of, and delivered to, the
Registered Holder at the address stated below.
30
IMPORTANT: PLEASE COMPLETE THE FOLLOWING:
1. The exercise of this Warrant was
solicited by ▇.▇. ▇▇▇▇▇ & Co., Inc.
2. The exercise of this Warrant was not
solicited.
Dated: X
Address
Social Security or Taxpayer
Identification Number
Signature Guaranteed
31
ASSIGNMENT
To Be Executed by the Registered Holder
in Order to Assign Warrants
FOR VALUE RECEIVED, _________________________ hereby sells, assigns and
transfers unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER
(please print or type name and address)
___________________________ of the Warrants represented by this Warrant
Certificate, and hereby irrevocably constitutes and appoints
____________________ Attorney to transfer this Warrant Certificate on the
of the Company, with full power of substitution in the premises.
Dated: X
Signature Guaranteed
THE SIGNATURE TO THE ASSIGNMENT OR THE SUBSCRIPTION FORM MUST
CORRESPOND TO THE NAME AS WRITTEN UPON THE FACE OF THIS WARRANT
CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERATION OR
ENLARGEMENT OR ANY CHANGE WHATSOEVER AND MUST BE GUARANTEED
BY A COMMERCIAL BANK OR TRUST COMPANY OR A MEMBER FIRM OF THE
CONTINENTAL STOCK EXCHANGE, PACIFIC STOCK EXCHANGE, MIDWEST
STOCK EXCHANGE OR BOSTON STOCK EXCHANGE.
32
EXHIBIT B
No. Class B W VOID AFTER ____________, 2001
____________ CLASS B WARRANTS
CLASS A REDEEMABLE WARRANT CERTIFICATE
TO PURCHASE ONE SHARE OF COMMON STOCK
GENISYS RESERVATION SYSTEMS, INC.
CUSIP __________
THIS CERTIFIES THAT, FOR VALUE RECEIVED
or registered assigns (the "Registered Holder") is the owner of the number
of Redeemable Warrants (the "Warrants") specified above. Each Warrant
initially entitles the Registered Holder to purchase, subject to the terms
and conditions set forth in this Certificate and the Warrant Agreement (as
hereinafter defined), one fully paid and nonassessable share of Common
Stock, $.0001 par value, of Genisys Information Systems, Inc., a New Jersey
corporation (the "Company"), at any time between , 1997 (the "Initial
Warrant Exercise Date"), and the Expiration Date (as hereinafter defined)
upon the presentation and surrender of this Warrant Certificate with the
Subscription Form on the reverse hereof duly executed, at the corporate
office of Continental Stock Transfer and Trust Company, ▇ ▇▇▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, as Warrant Agent, or its successor (the "Warrant
Agent"), accompanied by payment of $6.75 subject to adjustment (the
"Purchase Price"), in lawful money of the United States of America in cash
or by check made payable to the Warrant Agent for the account of the
Company.
This Warrant Certificate and each Warrant represented hereby are issued
pursuant to and are subject in all respects to the terms and conditions set
forth in the Redeemable Warrant Agreement (the "Warrant Agreement"), dated
________________, 1997, by and between the Company and the Warrant Agent.
In the event of certain contingencies provided for in the Warrant
Agreement, the Purchase Price and the number of shares of Common Stock
subject to purchase upon the exercise of each Warrant represented hereby
are subject to modification or adjustment. Each Warrant represented hereby
is exercisable at the option of the Registered Holder, but
no fractional interests will be issued. In the case of the exercise of less
than all the Warrant represented hereby, the Company shall cancel this
Warrant Certificate upon the surrender hereof and
33
shall execute and deliver a new Warrant Certificate or Warrant Certificates
of like tenor, which the Warrant Agent shall countersign, for the balance
of such Warrants.
The term "Expiration Date" shall mean 5:00 p.m. (New York time) on , 2001.
If each such date shall in the State of New York be a holiday or a day on
which the banks are authorized to close, then the Expiration Date shall
mean 5:00 p.m. (New York time) the next following day which in the State of
New York is not a holiday or a day on which banks are authorized to close.
The Company shall not be obligated to deliver any securities pursuant to
the exercise of this Warrant unless a registration statement under the
Securities Act of 1933, as amended (the "Act), with respect to such
securities is effective or an exemption thereunder is available. The
Company has covenanted and agreed that it will file a registration
statement under the Federal securities laws, use its best efforts to cause
the same to become effective, use its best efforts to keep such
registration statement current, if required under the Act, while any of the
Warrants are outstanding, and deliver a prospectus which complies with
Section 10(a)(3) of the Act to the Registered Holder exercising this
Warrant. This Warrant shall not be exercisable by a Registered Holder in
any state where such exercise would be unlawful.
This Warrant Certificate is exchangeable, upon the surrender hereof by the
Registered Holder at the corporate office of the Warrant Agent, for a new
Warrant Certificate or Warrant Certificates of like tenor representing an
equal aggregate number of Warrants, each of such new Warrant Certificates
to represent such number of Warrants as shall be designated by such
Registered Holder at the time of such surrender. Upon due presentment and
payment of any tax or other charge imposed in connection therewith or
incident thereto, for registration of transfer of this Warrant Certificate
at such office, a new Warrant Certificate of Warrant Certificates
representing an equal aggregate number of Warrants will be issued to the
transferee in exchange therefor, subject to the limitations provided in the
Warrant Agreement.
Prior to the exercise of any Warrant represented hereby, the Registered
Holder shall not be entitled to any rights of a stockholder of the Company,
including, without limitation, the right to vote or to receive dividends or
other distributions, and shall not be entitled to receive any notice of any
proceedings of the Company, except as provided in the Warrant Agreement.
Subject to the provisions of the Warrant Agreement, this Warrant may be
redeemed at the option of the Company, at a redemption price of $.10 per
Warrant, at any time commencing six (6) months after the Initial Warrant
Exercise Date, provided that (i) the closing bid price for the Common Stock
is reported by The Nasdaq Stock Market, Inc. ("Nasdaq"), if the Common
Stock is then traded in the over-the-counter market or (ii) the closing
sale price, if the Common Stock is then traded on Nasdaq/NM or a national
securities exchange, shall have equalled or exceeded for any twenty (20)
trading days within a period of thirty (30) consecutive trading days ending
on the fifth (5th) day prior to the Notice of Redemption, as defined below,
$7.25 per share (subject to adjustment in the event of any stock splits or
other similar events). Notice of redemption (the "Notice of
34
Redemption") shall be given not later than the thirtieth day before the
date fixed for redemption, all as provided in the Warrant Agreement. On and
after the date fixed for redemption, the Registered Holder shall have no
rights with respect to the Warrants except to receive the $.10 per Warrant
upon surrender of this Warrant Certificate.
Under certain circumstances, ▇.▇. ▇▇▇▇▇ & Co., Inc. collectively shall be
entitled to receive an aggregate of four percent (4%) of the Purchase Price
of the Warrants represented hereby.
Prior to due presentment for registration of transfer hereof, the Company
and the Warrant Agent may deem and treat the Registered Holder as the
absolute owner hereof and of each Warrant represented hereby
(notwithstanding any notations of ownership or writing hereon made by
anyone other than a duly authorized officer of the Company or the Warrant
Agent) for all purposes and shall not be affected by any notice to the
contrary, except as provided in the Warrant Agreement.
This Warrant Certificate shall be governed by and construed in accordance
with the laws of the State of New York without giving effect to conflicts
of laws.
This Warrant Certificate is not valid unless countersigned by the Warrant
Agent.
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be
duly executed, manually or in facsimile by two of its officers thereunto
duly authorized and a facsimile of its corporate seal to be imprinted
hereon.
Dated: ________________, 1997
[SEAL] GENISYS RESERVATION SYSTEMS, INC.
By: _____________________________
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, President
By: _____________________________
▇▇▇▇ ▇▇▇▇▇, Secretary
COUNTERSIGNED:
CONTINENTAL STOCK TRANSFER
AND TRUST COMPANY
as Warrant Agent
By: _____________________
35
Name: _____________________
Title: ____________________
SUBSCRIPTION FORM
To Be Executed by the Registered Holder
in Order to Exercise Warrants
The undersigned Registered Holder hereby irrevocably elects to exercise
Warrants represented by this Warrant Certificate, and to purchase the
securities issuable upon the exercise of such Warrants, and requests that
certificates for such securities shall be issued in name of
PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
(please print or type name and address)
and be delivered to
(please print or type name and address)
and if such number of Warrants shall not be all the Warrants evidenced by
this Warrant Certificate, that a new Warrant Certificate for the balance of
such Warrants be registered in the name of, and delivered to, the
Registered Holder at the address stated below.
36
IMPORTANT: PLEASE COMPLETE THE FOLLOWING:
1. The exercise of this Warrant was
solicited by ▇.▇. ▇▇▇▇▇ & Co., Inc.
2. The exercise of this Warrant was not
solicited.
Dated: X
Address
Social Security or Taxpayer
Identification Number
Signature Guaranteed
37
ASSIGNMENT
To Be Executed by the Registered Holder
in Order to Assign Warrants
FOR VALUE RECEIVED, _________________________ hereby sells, assigns and
transfers unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER
(please print or type name and address)
___________________________ of the Warrants represented by this Warrant
Certificate, and hereby irrevocably constitutes and appoints
____________________ Attorney to transfer this Warrant Certificate on the
of the Company, with full power of substitution in the premises.
Dated: X
Signature Guaranteed
THE SIGNATURE TO THE ASSIGNMENT OR THE SUBSCRIPTION FORM MUST
CORRESPOND TO THE NAME AS WRITTEN UPON THE FACE OF THIS WARRANT
CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERATION OR
ENLARGEMENT OR ANY CHANGE WHATSOEVER AND MUST BE GUARANTEED
BY A COMMERCIAL BANK OR TRUST COMPANY OR A MEMBER FIRM OF THE
CONTINENTAL STOCK EXCHANGE, PACIFIC STOCK EXCHANGE, MIDWEST
STOCK EXCHANGE OR BOSTON STOCK EXCHANGE.
38
